Dimapur, June 18 (MExN): Even as the NPF-DAN celebrates the Rs. 1500 Crore Plan allocation, the Congress today issued a caution: the slow but gradually increasing high borrowings along with unprecedented flow of centrally sponsored schemes’ funds, that tangible development at the ground-level remains questionable. The Congress issued a statement today stating that in spite of various grants and waivers from the Central government to Nagaland, increasing deficit in development and spending continues to vary a huge gap.
The Congress explained that the approved Plan budget for 2002–2003 was Rs.424 Crores and over the last seven years, has increased to the present Rs. 1500 Crores for 2010–2011. Also, a generous central grant of Rs.712 Crores was added (for the shortfall of expenditure to implement the 6th ROP). The statement was issued by Vaprumu Demo, general secretary of NPCC.
“The then NPF led DAN government was most fortunate to received Rs. 365 Crores grant from the Government of India whereby all the deficit were wiped out. Accordingly, the first NPF-led DAN budget presented for the year 2003 – 04 on 22–07–2003, was having a surplus budget of Rs. 18.47 Crores. The people of Nagaland also remember with gratitude to the then Prime Minister Atal Bihari Vajpayee’s generous grant of Rs.1050 Crores through economic package and unprecedented flow of centrally sponsored schemes, funds and a huge increase in the 12th Finance Commission recommendation.”
The Congress said that the Rs. 365 Crores grant was misused by the DAN Government. “The then Congress Legislative Party had demanded a White Paper on the utilization of the said grant of Rs. 365 Crores. However, due to rampant corruptions and total mismanagement, from a surplus budget of Rs. 18.47 Crores in the year 2003 – 04, the present government has created an unprecedented project budget deficit of Rs. 597 Crores by 2010 – 11or which could be much more,” the Congress said in reminder.
Under the Nagaland Fiscal Responsibilities and Budget Management Act 2005 and the Rules 2007, fiscal deficit was supposed to be reduced to 3% of the GDPS by the end of 2009–10 and “which was a miserable failure given the admitted project deficit of Rs. 597 Crores.”
The DAN government, the opposition said, had deprived the people of Nagaland a golden opportunity for discipline fiscal management by wiping out the deficit once for all and starting on a clean state. “Rather it was defeated by the total financial mismanagement, lack of financial discipline and rampant corruptions at all levels.”
The then CLP had warned that the “ghost of Rs.365 Crores shall continue to haunt the DAN Government” and this is true by the very fact that the state is presently facing such an acute financial crisis.
“The state outstanding debt has increased from Rs.2515 Crores in 2003-04 to about Rs.4900 Crores in 2010 and still mounting, as clearly admitted by the State Finance Department. An unprecedented increased of about Rs.2385 Crores within a period of six years and which is exclusive of the over Rs.500 Crores in the Civil Deposits. Also, the Nagaland Government is spending over Rs.300 Crores on mounting debt servicing every year. The current Balance Credit Revenue (BCR) of Rs.675.18 Crores is a clear indicator of the serious financial mismanagement in the State. Unless, some drastic measures are taken, the present NPF led DAN Government is leading the people of Nagaland towards financial emergency and a debt trap. There are no rational justifications for such high borrowings since Nagaland is purely a consuming State and not a producing State. The principle that high borrowing generates economic activity does not apply in Nagaland since the industrial productivity in the state has been dismal over the years.”
The Congress has said that the increased Plan budgets over the last seven years, high borrowing and unprecedented flow of centrally sponsored schemes funds have not resulted in tangible development on the ground. “It is not commensurate and just negligible. It clearly proves that besides creating a huge financial deficit, there is a huge development deficit under the present NPF led DAN Government and this was further substantiated by the Member of the Planning Commission of India that the state requires still more development…” the Congress said.
